TCTA faces challenges with raising finance for its projects primarily because of the prevailing global economic conditions and the poor reputation of state-owned entities (SOEs), CEO Percy Sechemane told a virtual media briefing on Monday, 22 March. Further complicating was the government’s tougher stance of issuing debt guarantees for SOEs in the last two years. It now took an average of 18 months to receive approval of borrowing limits from the Minister of Finance.
The exists confusion around interpreting TCTA’s mandate, which affected the issuance of guarantees. Further, stagnant tariffs negatively affect the organisation’s management of debt and the ability to attract new funding. Meanwhile, TCTA needs to raise R33 billion this year to fund infrastructures projects and to redeem debt.
Mr Sechemane was speaking to journalists during the presentation of the organisation’s 2019/20 annual report. He pointed out that TCTA had achieved a clean audit following the setback it suffered in the prior fiscal year with a qualified audit for the first time in the organisation’s history.
The Chairperson of the Board of TCTA, Gerald Dumas, added in a statement: “We are proud today to announce that TCTA has for the 32nd time received an unqualified audit opinion. We believe this vindicates the organisation and once again places it in the league of best performing and well-run SOEs in the country.”
Mr Sechemane explained that the report was out late, as the annual audit was completed four months later than the deadline of 31 August 2020, as the Auditor-General (A-G) only signed off on it in December 2020. The report was then tabled in Parliament on 18 January 2021.
The CEO stated that the delays were largely a result of the time it took to confirm the audit of the Lesotho Highlands Water Project (LHWP) on the Lesotho side. “Since the office of the A-G took over the audit of TCTA in 2018/2019, it has insisted that the activities of the entities under the government of Lesotho must be audited concurrently with TCTA”; he said. It was for the same reason that the annual audit in the previous financial year also took longer than usual.
While TCTA achieved an unqualified audit, there remain issues to be addressed regarding the LHWP. “Work still needs to be undertaken on clarifying the roles and responsibilities of the different parties on the Lesotho Highlands Water Project, or making the institutional arrangements less complicated,” added Mr Sechemane.
TCTA also shared plans on the National Water Resources Implementation Agency that President Cyril Ramaphosa announced in the 2021 State of the Nation address. The CEO informed the gathered journalists that TCTA had been put forward as a possible pilot for implementing the new body.
“TCTA is looking forward to this big challenge and hopes that it will be considered the ideal entity to herald in this new era in water management in the country;” said Mr Sechemane. “The organisation has had over three decades of experience in operating all the elements required in the establishment of the body.” – Staff Writer